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The Latest Tech Updates: Tesla, NVIDIA & Apple

Plus500 | Thursday 14 March 2024

The tech sector has been making waves across the financial markets recently mainly driven by the Artificial Intelligence (AI) boom, and Wednesday, March 13th, was no different. 

From Tesla to NVIDIA and Apple, here are the latest updates from some of the biggest names in the tech field:

an image of a supercomputer

Tesla’s Downgrade: Is the EV Giant’s Battery Draining?

Tech and Electric Vehicle (EV) giant Tesla (TSLA) has had a tumultuous year so far as it lost over 31% of its value since the start of 2024. The less-than-rosy performance was further worsened on Wednesday by a recent downgrade from Wells Fargo (WFC) analysts.

Tesla price chart on March 14th 2024

Despite the underwhelming performance, the downgrade may have come as a “shock” to some. This is because, according to WFC analyst, Colin Langan, who’s known for his Tesla analysis, the EV-maker will report “zero growth in sales volumes” in 2024. Furthermore, the company shares were downgraded from Equalweight to Underweight and other analysts revealed that it is a “growth company with no growth.”

Following the gloomy revelations, Tesla’s stock dropped by about 4.5% on Wednesday, hence hitting a 10-month record low. The company was even deemed the Magnificent Seven’s “biggest loser.”

But What Exactly Is Driving Tesla Downward?

It appears that lower consumer demand, high inflation and interest rates, and economic uncertainties, have put a strain on the EV giant and significantly lowered EV sales, which are considered the company’s primary revenue source.

Interestingly, the lower demand for EVs was not confined solely to Tesla, as many automotive companies suffered the same fate. Companies like Ford (F), General Motors (GM), and Rivian (RIVN) all reported lower EV demands and challenges.

Could AI Give Tesla a Boost?

Despite the challenges and the recent downgrades, some like Cathie Wood, the head of Ark Investment Management, are still bullish on Tesla.  According to Wood, Tesla is not just an EV company, and it too, can benefit greatly from the AI revolution, especially due to its autonomous self-driving software. Wood also believes that the company’s AI software has the potential to “propel to an astronomical valuation in the future.” (Source: Yahoo Finance)

Nonetheless, only time will tell what really lies ahead for Tesla’s stock.

NVIDIA Takes a Breather Ahead of AI Conference

Chip giant, NVIDIA (NVDA), has been riding the AI wave for quite some time and its stock price has responded accordingly as it soared by more than 90% since the start of 2024.

NVIDIA price chart on March 14th 2024

Nonetheless, it seems that the AI chip giant’s stock has taken a breather and dropped by over 1% on Wednesday ahead of the upcoming AI conference. It appears that in spite of its stellar performance, NVIDIA’s shares are considered “the third-most-shorted.” This means that sellers short the company’s stock by borrowing its shares and then betting against it. The company experienced bets of $18.3 billion against it.

Nonetheless, whereas this trading strategy proved far from profitable to these short sellers, it may still indicate a bearish outlook on NVIDIA’s stock. Additionally, NVIDIA’s implied volatility seems to be rising, which further adds to the uncertainties surrounding its trajectory.

Despite the recent market downturns, traders may still want to keep an eye on NVIDIA’s upcoming AI conference,” GTC 2024,” as AI is expected to take centre stage. The conference will take place from March 17 until March 21 at the San Jose Convention Center and is expected to provide valuable insights about the company’s new products. 

Moreover, many analysts project NVIDIA to overhaul computer infrastructure with accelerators valued in the trillions of dollars, potentially resulting in substantial gains.

Additionally, it may be worth noting that according to a report by McKinsey, in the next three years, anything unrelated to AI can possibly become “ineffective” or “obsolete.” This, in turn, could further highlight NVIDIA’s possible growth in the future as the company continues to advance AI.

It will be worth keeping track of NVIDIA’s stock price following next week’s event to see how it might affect this tech leader’s performance. 

Will Apple Rebound?

Whereas tech companies like NVIDIA have experienced an optimistic run this year, iPhone maker Apple (AAPL) had a bumpy ride so far. Since the start of 2024, Apple lost almost 8% of its value. Slower iPhone sales in China, a $2 billion antitrust fine, in addition to regulatory headwinds and rising competition took a toll on the tech giant’s stock.

Apple price chart on March 14th 2024

However, in the face of these challenges, it appears that some Wall Street analysts are still optimistic about this company’s performance. These bullish analysts believe that Apple too, like many of its competitors, can take advantage of the generative AI hype along with its big user base.

They argue that Apple plans to integrate AI technology into on-device inference for extensive language models, which will significantly enhance the user experience on iPhone, Mac, and iPad. Furthermore, the forthcoming iOS update from Apple is anticipated to provide the company with a crucial boost.

Finally, it may be worth noting that Apple’s involvement in AI has been longstanding as the company developed neural engines on which AI apps can run on devices like iPhones, iPads, and more. 

Furthermore, the company continues to deploy a significant number of devices, which can highlight its sustained demand and success.

Therefore, it will be worth seeing how it will fare in the near future. 

Conclusion

While the big tech sector appears to be heading in various directions with some companies gaining while others are losing, it appears that the majority of projections indicate that most tech companies can benefit from the AI boom. However, whether this AI hype is a bubble or actually here to stay is yet to be determined.


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